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X = 2 ! ! A taxable bond has a yield of 8 % and a municipal bond has a yield of x % .
X A taxable bond has a yield of and a municipal bond has a yield of If you are in a tax bracket, which bond do you prefer? Suppose you are thinking of purchasing the stock of XYZ Electronics, Inc. You expect it to pay a $ dividend in one year. You believe you can sell the stock for $ at that time. You require a return of on investments of this risk. What is the maximum you would be willing to pay? Suppose you are thinking of purchasing the stock of XYZ Electronics, Inc. In addition to the dividend and price from year one you expect it to pay a $ dividend in two years. You believe you can sell the stock for $ at that time. You require a return of on investments of this risk. What is the maximum you would be willing to pay?
X
A taxable bond has a yield of and a municipal bond has a yield of If you are in a tax bracket, which bond do you prefer?
Suppose you are thinking of purchasing the stock of XYZ Electronics, Inc. You expect it to pay a $ dividend in one year. You believe you can sell the stock for $ at that time. You require a return of on investments of this risk. What is the maximum you would be willing to pay?
Suppose you are thinking of purchasing the stock of XYZ Electronics, Inc. In addition to the dividend and price from year one you expect it to pay a $ dividend in two years. You believe you can sell the stock for $ at that time. You require a return of on investments of this risk. What is the maximum you would be willing to pay?
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